Survey: Malaysians Warm Up to Cryptocurrencies, Bitcoin Still on Top

Investors in Malaysia are increasingly turning to digital currencies as these have become popular investment opportunities. While bitcoin remains the clear favorite, investors are also looking at other cryptocurrencies as well, including ether, according to a new survey conducted by Bitcoin startup Luno.

As part of a trend that signals rising awareness and adoption of alternative cryptocurrencies, 47.4 percent of Malaysian cryptocurrency investors have bought bitcoins and other “altcoins,” against 52.6 percent who have only bought bitcoins. Among the most popular altcoins, ether, the native cryptocurrency of the Ethereum network, is the top winner with 56.4 percent of altcoin investors having bought the asset. Litecoin (7.4 percent), Ripple (6.5 percent) and Dogecoin (6.5 percent) also rank among the most sought-after coins.

“We’ve done this survey in a few other countries as well, so a lot of trends were similar across countries. Most of the results point to the fact that bitcoin adoption and usage is increasing everywhere,” Mriganka Pattnaik, Countries Associate at Luno, told Bitcoin Magazine.

Luno, which offers storage, exchange and transaction services, operates across Southeast Asia, as well as in Nigeria, South Africa and the U.K. In Malaysia, the company has over 100,000 verified customers.

Among the main reasons for buying bitcoins, Malaysian investors cited investment (44.7 percent) as the key motivation, followed by speed, affordability and convenience (16.3 percent), and trading/speculation (15.1 percent).

Investors are somewhat confident in bitcoin as an investment tool, with 48.8 percent responding that they trusted the digital currency, against 19.7 percent who said they didn’t.

Interestingly, over 55 percent of respondents said they checked the bitcoin price throughout the day, which “shows a high level of engagement with people who trade in bitcoin and is a positive sign for it,” said Pattnaik.

Much-Needed Regulation

In Malaysia, a major drawback to bitcoin adoption is the lack of regulation surrounding digital currencies. Nearly 90 percent of investors said they would buy more bitcoins if the government passed some sort of laws around it, indicating that “regulation, when it arrives, will be a major boost for bitcoin and ensure that bitcoin trading reaches a new high,” said Pattnaik.

The sentiment is likely attributable to the surge of scams and Ponzi schemes that have recently emerged across Asia.

“There are several Bitcoin high-yield investment programs (HYIP), multi-level marketing (MLM) or Ponzi schemes that seem to have negatively affected customers in Malaysia, like MMM Global or BitKingdom,” said Pattnaik. “Customers lose their money investing in schemes that promise very high returns and they harbor a misconception about Bitcoin.”

Earlier this year, Indian police in Mumbai arrested 18 individuals associated with OneCoin, a massive Ponzi scheme promoted as a “cryptocurrency with a blockchain.” The scheme involved investing money in a “cryptocurrency” called OneCoin wherein participants were promised absurd returns.

The investigation recovered 245.7 million INR ($3.66 million) in nine bank accounts, but a further 750 million INR ($11.16 million) was transferred out before authorities were able to seize it.

Similarly, the UFun billion-dollar Ponzi scheme managed to lure over 14,000 investors from Thailand, Malaysia, Indonesia and China before Thai and Chinese authorities began a crackdown on the people behind the scam.

UFun made money by persuading people to contribute to various investment plans as well as purchase so-called UTokens, a new “cryptocurrency” that promised unrealistic profits.

One such scheme that’s currently active across Southeast Asia, and particularly in Malaysia and Vietnam, is BitKingdom. Dubbed the “Malaysian MMM Global Ponzi clone,” BitKingdom solicits investment in bitcoin on the promise of a 120 percent return on investment after 20 days. A referral commission of 10 percent is paid when personally recruited affiliates invest funds.

Schemes like these have “tarnished the reputation of the Bitcoin industry as a whole,” said Pattnaik.

While the Malaysian government has so far remained silent on the subject of bitcoin and digital currency regulation, Luno continues to stay in regular contact with Bank Negara Malaysia (BNM), the country’s central bank and financial regulator. Pattnaik said that his company has delivered numerous training sessions and workshops to the authority on the subject.

“BNM has done a great job so far in taking the initiative to learn more about the [Bitcoin] industry and stop/prevent scams,” he said. “With regards to policy, [regulating bitcoin is] not a very easy thing to do. I can’t comment on when or how BNM will regulate the industry, but they are always in touch with us around this and we are more than happy to provide them with inputs.”